Healthcare Reform: Today and Tomorrow

What is wrong with our healthcare system, and does Obamacare fix it? The debate over healthcare reform is really a debate over what makes for a successful healthcare system, yet these two questions are not commonly asked. The question that does get asked is this: Do you support Obamacare?

In the current state of heightened nation-wide attention to healthcare reform, this last question is one most Americans are prepared to answer. According to the September tracking poll from the Kaiser Family Foundation, 43 percent of respondents feel unfavorable toward the 2010 healthcare reform, while 39 percent feel favorable. Among Republicans, the number of people who feel favorable towards Obamacare drop to 11 percent, while among Democrats they rise to 67 percent. Only 17 percent of respondents said they didn’t know. Further evidence from the same poll suggests that if asked why the reform was good or bad, many respondents would not be able to give a precise answer. Among those polled, 42 percent didn’t know the law expanded Medicaid, 37 percent didn’t know about the subsidies it provides to help buy insurance, and a whopping 85 percent could not identify October 1 as the opening day of the new health insurance marketplaces.

All told, strong opinions in the absence of clear understanding suggest we’ve lost track of the fundamental questions of what healthcare reform should be and whether or not Obamacare meets those goals.

Obamacare has its roots in one answer to the question of what a successful healthcare system should do. The law began with the proposition that every American should have access to healthcare, regardless of their economic status. That’s a straightforward goal, but not a simple one to achieve in the context of a century-old health care system and a contentious political environment. As a result, the law is far-reaching, cumbersome, and complicated, but all of its many facets can be viewed as attempts to expand healthcare access by expanding healthcare coverage. That aim is crystallized in the form of Obamacare’s individual mandate: starting in 2014, everybody has to have health insurance or pay a yearly penalty.

In order to make that requirement viable, the law had to ensure that nobody could be denied insurance if they tried to obtain it. Under the old system, companies could refuse to grant coverage or radically increase prices based on a person’s medical history, commonly referred to as “preexisting conditions.” Obamacare changed that. Now, insurers have to sell coverage to anyone who applies, and can only base prices on an individual’s age, location, and whether he or she smokes. Notably, this also means prices can no longer depend on whether that person is a “he” or a “she.” While this particular requirement will raise costs for healthy young men, the new rules allow everyone to get insured, because no one can be deemed uninsurable.

However, making sure everyone has the right to enroll in coverage is not sufficient to get everyone insured. Health insurance still has a cost, and not everyone can afford to pay it. Obamacare employs two mechanisms to address this: the new health insurance Marketplaces, and the expansion of Medicaid.

Launched October 1, the Marketplaces are websites where people will shop for health plans the way you shop for used books on Amazon, providing side by side comparisons of quality and cost (at least, that’s the theory). Beyond aiming to make the shopping experience easier for everyone, the Marketplace also offers direct affordability assistance for lower and middle-income Americans in the form of tax credits to reduce monthly premiums and cost-sharing reductions to help with out-of-pocket payments.

For those at the very bottom of the income scale, Obamacare expands Medicaid, the public insurance program that was previously only available to families with children. Now, individuals making up to 133 percent of the federal poverty level can have Medicaid, whether they have kids or not.

While these provisions aim to make health insurance affordable and accessible to all, about forty-four million individuals are expected to remain uninsured in 2014, dropping to thirty-one million by 2020. By that time about twenty-five million of today’s uninsured are expected to attain coverage, meaning the total population of uninsured is decreasing by less than half.

There are a variety of reasons for this shortfall. For one, last year’s Supreme Court decision allowed each state to decide whether or not to expand Medicaid, and several states subsequently opted out. In those states, poor adults with no children cannot receive public insurance, and because the healthcare reform law does not account for this possibility, they cannot receive subsidies on Marketplace either. As a result, approximately eight million individuals are expected to remain without access to affordable coverage. (These individuals will be exempted from paying the yearly penalty.) Two other hindrances limit the success of Obamacare. First, many may simply choose to pay the relatively inexpensive yearly penalty rather than invest in insurance and, second, undocumented immigrants are not permitted to enroll through the Marketplaces, leaving the entirety of that population uninsured.

Even though the new policies of Obamacare are insufficient to get everybody covered, they nevertheless grow out of a vision that holds universal access as the key trait of an ideal healthcare system. However, this is not the only vision for healthcare out there, nor is it likely that achieving universal access alone would solve every issue of cost and quality apparent in our current system.

Now that we’ve begun to explore Obamacare, its goals, success and limitations, the questions we are left with are these: Should we be aiming for universal coverage? If so, how? By fully expanding Medicaid? By providing more subsidies, by raising the penalty for being uninsured, or by some other means? And if universal coverage is not the solution, then what type of healthcare system should be made available? These questions are necessary to ask, but difficult to answer. Only after we gain a better understanding of where Obamacare leaves us today can we begin the important discussion of where healthcare should be tomorrow.